Palo Alto Networks stock rockets more than 10% as cybersecurity company hikes annual guidance a third time

Palo Alto Networks Inc. shares rallied in the extended session Thursday after the cybersecurity company beat the Street’s expectations for the quarter and hiked its full-year guidance for a third time in a row.

“We saw strong top-line growth in Q3, which is a testament to our teams’ consistent execution in capitalizing on the strong cybersecurity demand trends,” said Nikesh Arora, Palo Alto Networks PANW,
chief executive and chairman, in a statement. “On the back of this strength across our portfolio, we are again raising our guidance for the year across revenue, billings and earnings per share.”

Palo Alto Networks boosted its full-year outlook for a third quarter in a row, forecasting adjusted earnings of $ 7.43 to $ 7.46 a share, revenue of $ 5.48 billion to $ 5.5 billion, and billings of $ 7.11 billion to $ 7.14 billion. Last quarter, the company had hiked its outlook to adjusted earnings of $ 7.23 to $ 7.30 a share, versus a previous forecast of $ 7.15 to $ 7.25 a share, and raised forecasts for revenue and billings once again.

Analysts expect $ 7.29 a share on revenue of $ 5.46 billion and billings of $ 6.82 billion.

Accordingly, Palo Alto Networks said it expects adjusted fiscal-fourth quarter earnings of $ 2.26 to $ 2.29 a share on revenue of $ 1.53 billion to $ 1.55 billion and billings of $ 2.32 billion to $ 2.35 billion, while analysts surveyed by FactSet had forecast $ 2.22 a share on revenue of $ 1.53 billion and billings of $ 2.23 billion.

Shares soared more than 10% after hours, following a 0.5% decline in the regular session to close at $ 436.37.

For the fiscal third quarter, Palo Alto Networks reported a loss of $ 73.2 million, or 74 cents a share, compared to a loss of $ 145.1 million, or $ 1.50 a share, in the year-ago period. Adjusted earnings, which exclude share-based compensation charges and other items, were $ 1.79 a share, compared with $ 1.38 a share in the year-ago period.

Revenue rose to $ 1.39 billion from $ 1.07 billion in the year-ago quarter. Billings, which reflects future business under contract, rose to $ 1.8 billion, compared to $ 1.27 billion a year ago.

Analysts had forecast earnings of $ 1.68 a share on revenue of $ 1.36 billion and billings of $ 1.6 billion, while Palo Alto Networks had forecast earnings of $ 1.65 to $ 1.68 a share on revenue of $ 1.35 billion to $ 1.37 billion and billings of $ 1.59 billion to $ 1.61 billion.

Palo Alto Networks has gone more than well over a year without announcing a new acquisition, following a four-year M&A spree, having acquired a dozen companies – the largest being attack-surface management company Expanse Inc. and security orchestration, automation and response company Demisto Inc. – for a total cost of about $ 3.3 billion. In August, the company said it was not looking for any more acquisitions, a stance that Arora reiterated last quarter.

Palo Alto Networks shares are up 30% over the past 12 months. In comparison, the ETFMG Prime Cyber ​​Security ETF HACK,
+ 0.31%
is down 19%, the S&P 500 index SPX,
is off 5%, and the tech-heavy Nasdaq Composite Index COMP,
is down 14%.

Back in December, Palo Alto Networks joined the Nasdaq 100 Index NDX,
which is down more than 10% over the past 12 months.


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